Before you sign any loan agreement, you need to know three numbers: your monthly payment, total interest paid, and the true cost of borrowing. A $30,000 car loan at 6% for 60 months costs $580/month and $4,800 in total interest. Stretch that to 72 months and your payment drops to $497 but total interest jumps to $5,784. This calculator breaks down any loan into those critical numbers so you can compare terms, rates, and payoff strategies before committing. Most borrowers focus only on monthly payment, which is exactly how lenders sell longer terms that cost you thousands more.
Loan Payment Calculator
How to Use This Calculator
- Enter the loan principal — the total amount you are borrowing
- Set the annual interest rate (APR) from your loan offer or pre-approval
- Choose the loan term in months or years
- Review your monthly payment, total interest, and total cost of the loan
- Try different scenarios — shorter terms have higher payments but dramatically lower total cost
How It Works
This loan payment calculator uses established formulas to provide accurate results.
The basic rule:
- Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1]
- Total Interest = (Monthly Payment × Number of Months) − Principal
- Extra payments reduce principal faster, saving interest over the life of the loan
Tax laws and financial markets change frequently. Verify current rates with your financial institution.
Tips & Considerations
- A 1% rate difference on a $300K 30-year mortgage saves over $60,000 in total interest. Always shop multiple lenders.
- Biweekly payments instead of monthly effectively add one extra payment per year and can shave 4-5 years off a 30-year mortgage.
- The first years of a loan are almost entirely interest. On a 30-year mortgage, less than 30% of your first year's payments go toward principal.
- Prepayment penalties exist on some loans. Check your agreement before making extra payments — most auto and federal student loans have none.
Frequently Asked Questions
How much is the monthly payment on a $25,000 loan?
A $25,000 loan at 7.5% interest for 5 years has a monthly payment of about $501. At 5% for 5 years, the payment drops to $472. For a 3-year term at 7.5%, the payment jumps to $777 but saves you $2,723 in total interest. The payment depends entirely on interest rate and term length — shorter terms mean higher payments but dramatically less total interest paid.
How much interest do you pay on a 5-year loan?
On a $25,000 loan at 7.5% for 5 years, you pay approximately $5,068 in total interest, making your total repayment $30,068. That means interest adds about 20% to the original loan amount. At 10%, total interest jumps to $6,873 (27.5% of the loan). Interest rates make an enormous difference — even 2% lower can save you thousands over the life of the loan.
Is it worth making extra payments on a loan?
Almost always yes, especially on high-interest loans. Adding just $100 per month to a $25,000 loan at 7.5% for 5 years saves you about $1,197 in interest and pays off the loan 10 months early. The return on extra payments equals your interest rate — paying an extra $100/month on a 7.5% loan is equivalent to earning a guaranteed 7.5% return on that money, which is excellent.
What is a good interest rate for a car loan?
In the current market, good car loan rates for new vehicles range from 5-7% for borrowers with good credit (700+) and 3-5% for excellent credit (750+). Used car loans typically run 1-2% higher. Rates above 10% are considered expensive, and above 15% you should consider alternative options or work on improving your credit first. Credit unions often offer rates 1-2% lower than banks and dealership financing.
Should I choose a shorter or longer loan term?
A shorter term always saves money on total interest but requires higher monthly payments. A 3-year car loan at 7% costs about 11% of the principal in total interest, while a 6-year loan at the same rate costs about 23% — more than double. Choose the shortest term you can comfortably afford while maintaining an emergency fund and meeting other financial goals. Avoid stretching car loans beyond 5 years, as you risk being upside-down on the loan.